GDP Per Capita For American Ethnicities

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The new site Supereconomy has a first blog post and it`s a good one. It cannonballs into the America v. Europe income fray between Paul Krugman (“Learning from Europe“) and Jim Manzi (“Keeping America`s Edge“) by comparing the GDPs of the Western European countries whose policies Krugman prefers to the per capita GDPs of Americans by self-identified ancestral nationality.

Krugman asks:

Actually, Europeâ€™s economic success should be obvious even without statistics. For those Americans who have visited Paris: did it look poor and backward? What about Frankfurt or London?

I don`t have a strong opinion on this Europe vs. U.S. income question: I`ve seen London and I`ve seen France, and the parts I saw looked spiffy, but for some reason I skipped sightseeing in the parts where the youths hold car-be-ques, so I can`t say I`ve seen a representative sample of Europe. I`m sure Dr. Krugman typically stays in banlieues when he`s in Europe, but I try not to.

Super-Economy argues that Europeans make more money in America than in Europe.

For example, the per capita GDP of Sweden is $36,603. But the Census says the per-capita income of Swedish-Americans is such that you can estimate a per capita GDP for Swedish-Americans of $56,865, a 55% advantage for Swedes in America over Swedes in Sweden. You should adjust Sweden`s figure for the non-Swedish population, but that`s still a big gap.

Overall, Supereconomy finds a 56% GDP advantage for Americans who identify themselves as being from the original 15 countries of the European Union over those EU-15 countries. He notes:

For one country, Sweden, I have calculated the figures when excluding immigrants to Sweden. This reduced the American advantage from 55.4% to 50.5%. If we believe that this is representative of Europe (Sweden has a higher share of foreign born than most other European nations) the American advantage should be around 53%.

What`s interesting to me is the rank order among Western Europeans in America.

How do the Western European ancestries rank within the US? Here`s a summary of Super-Economy`s most novel table:

Plain “American” isn`t in the table, but presumably it would be below $50k, judging by the gap between British ($60k) and British + American ($54k).

Keep in mind that these are self-identified ancestral nationalities, and many Americans have several to choose among, so arbitrary whim and fashion influence which ones mixed-nationality people choose. For example, compared to earlier Censuses, German seemed to be in fashion in 2000 and British out of fashion. In reality, a lot of Protestant Americans with German ancestors also have British ancestors, and vice-versa, so there is a fair degree of arbitrariness about what people whose ancestors have been in the country for over 100 years choose. Similarly, a lot of Catholic Americans are some combination of Irish, Italian, German, and French. Not all siblings will choose the same nationality.

The biggest advantages for Americans over their respective European cousins are for Austrians, Portuguese, and Italians. The smallest advantages are Luxembourg (-8%, tax haven), Norway (+1% – oil), Ireland (+15% — the Irish GDP is somewhat inflated by low corporate taxes so multinationals go out of their way to assign profits to their Irish operations), and Netherlands (perhaps Dutch merchants tended to stay home while Dutch farmers emigrated?).

The anomalously high Austrian figure is probably mostly due to selective immigration (e.g., Arnold Schwarzenegger — i.e., a man with a plan) rather than mass immigration of hungry peasants. I don`t recall ever passing through an Austrian-American rural community in the U.S. Less than a million Americans self-identify as Austrian.

(A commenter points out that many of the Austrians are probably Jewish. Viennese Jews were famously well-educated, so that sounds like a good explanation. The Census Bureau doesn`t want you to answer “Jewish” to the ancestral nationality question, so most Jewish-Americans pick an Eastern European territorial state such as Russia to answer this question. Austria is the most eastern of the EU-15 countries in this table.)

The Swiss are a little above average probably for similar reasons of selective technical immigration. I`ve driven through a Swiss-American farming community in Wisconsin, but other Swiss immigrants came because they were already technically skilled (e.g., my paternal grandfather was Roentgen`s deliveryboy for the lens company when the great German physicist was inventing the X-ray machine; lacking a college degree, but with better high tech lens skills than were common in America at the time, a decade later my grandfather came to the U.S. and wound up a successful X-ray machine salesman).

Overall, the various nationalities of Western European-Americans seem pretty similar in per capita GDP. I doubt if anybody is too surprised by Portuguese ending up last, but even they aren`t that far down.

If you adjusted for cost-of-living differences, there would probably be a different rank order. The more urbanized groups (Greeks? Irish?) would probably drop a little and the less urban (British? Germans? Swedes?) would tend to do better in terms of cost of living. But I`m just guessing here.